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BP's Waning Britishness Causes Few Ripples in UK

Wednesday, 28 Jul 2010 02:02 PM

 

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Its chairman is Swedish, a growing chunk of its revenue comes from Russia and its incoming chief executive speaks with an American accent. So goes the Britishness in the company once known as British Petroleum.

BP PLC's appointment of Managing Director Robert Dudley to replace luckless Briton Tony Hayward as CEO has drawn a muted reaction in Britain, however. While residents of Paris or Rome might be chagrined to see a foreigner running one of their country's corporate giants, politicians and the public here appear relaxed about it.

"British investors care about one thing and one thing alone," said Matthew Gwyther, editor of Management Today magazine, "and that is the share price.

"If the share price can be shored up by having an American in charge, that's a good thing as far as they're concerned."

BP's holdings and investors have become more American over the years — it is the top oil and gas producer in the U.S. — but not everyone is quite so sanguine about the change marked by Dudley's ascension.

Tom Bower, author of "The Squeeze: Oil, Money and Greed in the 21st Century," said it's an indictment of BP that it couldn't find a British leader to succeed Hayward.

"What it shows is there is a lack of British talent within BP — and within Britain PLC," said Bower.

BP's shares were buoyed by anticipation of Hayward's departure, but dipped after Tuesday's announcement of Dudley's appointment and news that BP would sell off $30 billion in assets to help pay for the Gulf of Mexico oil spill.

On Wednesday, shares were down less than 1 percent at 402.5 pence ($6.27) on the London Stock Exchange. In New York, shares were down 23 cents, less than 1 percent, at $37.77 in afternoon trading Wednesday.

Business and patriotism are often uneasy allies, and many countries wrestle with how far to go in protecting parts of their economies from foreign ownership. The U.S., for example, bars foreigners from controlling airlines, while France protects sectors including defense.

Successive British governments have touted the country's economy as one of the most open in the world, placing little restriction on outside ownership of British firms. More than 40 percent of British-listed shares are foreign-owned, according to the Office for National Statistics, and many national icons are in the hands of outsiders. Automaker Jaguar Land Rover, electricity supplier British Energy and Harrods department store are owned respectively by India's Tata Motors, France's EDF SA and Qatari investors.

The passionately supported soccer teams of England's Premier League are often foreign-owned, too. League champion Chelsea is owned by Russian Roman Abramovich, whose deep pockets have been largely welcomed by fans. Less popular is the ownership of Manchester United by the Glazer family, which also owns the Tampa Bay Buccaneers of the NFL and is heavily in debt. United's fans have launched a so-far unsuccessful bid to take back the team.

Similar protests have arisen when the targeted firms are especially iconic or beloved. When Kraft Inc. bought chocolate maker Cadbury earlier this year, sweet-toothed Britons worried about jobs — and the quality of their confectionery — complained. The deal went through nonetheless, and Kraft announced it was closing a factory in Somerdale, western England, that employed 400 people.

In BP's case, however Britons complain that Americans have overemphasized BP's Britishness since an explosion aboard the Deepwater Horizon rig in the Gulf of Mexico in April triggered the biggest offshore oil spill in U.S. history.

President Barack Obama and other politicians pointedly referred to the company as "British Petroleum," a name it abandoned a decade ago after merging with Amoco and acquiring U.S. firms Arco and Castrol.

"The U.K. public has been mystified about just how much the company was vilified just because it is British," Gwyther said.

"People on this side of the Atlantic feel very sore about this. They feel quite bruised by the whole thing."

Prime Minister David Cameron has repeatedly stressed BP's multinational status, pointing out that the company is arguably as American as it is British.

It employs almost 23,000 people in the U.S., more than twice as many as in Britain. About 40 percent of shares are held by Americans, roughly the same amount as by Britons. Millions of British pension-holders have investments in BP — but so do millions of American retirees. Several senior board members are American, and chairman Carl-Henric Svanberg is from Sweden.

Stephen Pope, chief global equity strategist at Cantor Fitzgerald, said nationalism and investing don't mix.

"We live in a global world," Pope said. "We need the best person to do the job, not necessarily a national person to do the job.

"It's like people saying the English football team needs an English manager," rather than its Italian coach, Fabio Capello.

Pope said Dudley's nationality could help BP, especially since he spent part of his childhood in Mississippi, one of the states affected by the oil spill.

"The fact that he is American means he may have a bit more influence with American politicians," he said. "And as an American, he speaks English."

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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